Savings update: market strengthening across the board

21 August 2018
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Average rates are rising across the board for first time in seven years.

Data monitor Moneyfacts’ latest UK Savings Trends Treasury Report shows the savings market is strengthening, with all average rates rising for the first time since February 2011.

As far as best buys are concerned, a growing number of providers are paying a whisker over 2% to savers willing to tie their money up for 12 months. The best one-year rate is 2.06% from Charter Savings Bank while Paragon, Secure Trust and ICICI banks all pay 2.02%. 

However, the average rate according to research by data monitors Moneyfacts is just 1.32%. 

For two years, leaders include Investec Bank at 2.25% and Secure Trust Bank 2.26%.

The top easy-access rate is 1.4% from Coventry Building Society on its Limited Access Saver 2. It comes with a 0.25 percentage point bonus for the first year and limits you to making three free withdrawals every 12 months.

BM Savings Internet Saver pays 1.35%. There are no withdrawal restrictions, but it comes with a 12-month bonus of 1.15 points. After that, your rate plummets to just 0.2%.

The top rate with no bonus and no withdrawal restrictions comes from Paragon Limited Edition Easy Access account at 1.31%. RCI Bank Freedom Account and Shawbrook Bank Easy Access 12 follow close behind at 1.3%. 

Ford Money has upped its rate to 1.29%, with the rate applying to all savers already in the account rather than just new savers.

On easy-access cash Isas the best rate comes from Virgin Money’s Double Take E-Isa at 1.35%, but you are limited to making two withdrawals a year.

The top rate with no withdrawal restrictions is 1.31% from Paragon’s Limited Edition Easy Access Cash IsaShawbrook Bank Easy Access Cash Isa 4 pays marginally less at 1.3%.

On fixed rate Cash Isas, Bank of Cyprus pays 1.54% for a year, with Paragon at 1.5% and Ford Money 1.45%. Coventry Building Society also pays 1.5%, but you have to tie your money up until the end of November next year rather than for just 12 months.

The top two-year rate is 1.7% from both Paragon and Shawbrook Bank.

Comments

In reply to by anonymous_stub (not verified)

Why on earth does Paragon offer a 2-year non-ISA fixed rate at 2.02% whilst only offering 1.7% on an ISA 2-year fix? What is the difference in the terms? Ah - the difference is (coincidentally) very similar to the amount of tax that you might have to pay on the non-ISA account interest (assuming that you earn over £1000pa in non-ISA interest) - in other words Paragon is effectively stealing the tax advantage of their ISA for themselves. Not meaning to malign Paragon alone - most institutions do the same - and I'm not the first person to notice this phenomenon. It just makes a mockery of ISAs.

In reply to by anonymous_stub (not verified)

You are much too easy going. the Banks would not dare to formally collude in setting interest rates, but the unspoken agreement to sit on their hands amounts to the same thing. It is ridiculous to have such a difference between easy access and 1-year fixed.For ages, you have been promoting RCI as marvellous, but they did not respond to previous base rate rise and look unlikely to respond to latest. Their rate when they started ws much better than it is now.For goodness sake, show some criticism

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